Developing KPIs That Drive Process Safety Improvement

Abstract

Abstract A case study is provided describing Lloyd's Register's development of a set of Key Performance Indicators (KPIs) for Process Safety Management (PSM) for an oil and gas client. The development process is described in this paper along with discussion of how the KPIs were developed and designed to support the client in gaining a clearer picture of their current Process Safety performance and to drive the improvement of that performance. This paper includes discussion of the number of KPIs that are introduced, the sequencing of introduction of KPIs, the associated implementation requirements, the reporting of the metrics to management at all levels in the organisation, and the value provided by both the measurement and reporting of the KPIs. Introduction The Baker Report (Baker 2007) will have provided uncomfortable reading for many senior oil and gas managers when first published. The Technical Director of a client of Lloyd's Register's read his copy on the plane home from a business trip. The findings left him feeling distinctly uneasy that some of the same conditions that existed at Texas City before the incident in 2005 may also exist in his own company. His concern motivated the company to rise to the Baker Report's challenge to all process-related companies to review their own Process Safety Management practices. During 2007 and 2008 Lloyd's Register worked with them to establish a realistic understanding of the PSM performance across the company. 'Process safety' is defined in the Baker Report (Baker 2007) as "…hazards [that] can give rise to major accidents involving the release of potentially dangerous materials, the release of energy (such as fires and explosions), or both. Process safety incidents can have catastrophic effects and can result in multiple injuries and fatalities, as well as substantial economic, property, and environmental damage." Based on Bill Hewlitt's truism that "you cannot manage what you cannot measure", one element of the work carried out with our client was to review their current mechanisms for measuring PSM performance and to work with them to establish a comprehensive set of Process Safety KPIs that would provide both leading and lagging measures. This set of Process Safety KPIs needed to establish both a baseline of realistic current process safety performance, and also enable all levels of the organisation to understand and drive improvements in process safety performance in the short to medium term. Why develop KPIs? KPIs give an indication of how well a process or practice is working. In relation to process safety this provides a measure of how well the barriers or hazard controls related to preventing process safety incidents and the mitigation measures preventing escalation are working. For example, measuring compliance with Permit to Work requirements, where the Permit to Work system is designed to control hazards such as ignition sources, provides an indication of how well the PTW controls those hazards.